Ben Bernanke (Princeton pic)
Ben Bernanke, the former Chairman of the U.S. Federal Reserve, has been named this year’s Nobel Prize laureate in economic sciences, along with Douglas Diamond and Philip Dybvig. The Nobel organization said that they were awarded the prize, “for research on banks and financial crises.” It added that they have significantly improved our understanding of the role of banks in the economy, particularly during financial crises. An important finding in their research is why avoiding bank collapses is vital.
In the case of Ben Bernanke, specifically, Nobel is acknowledging how he analyzed the Great Depression of the 1930s, the worst economic crisis in modern history. “Among other things,” they said, “he showed how bank runs were a decisive factor in the crisis becoming so deep and prolonged. When the banks collapsed, valuable information about borrowers was lost and could not be recreated quickly. Society’s ability to channel savings to productive investments was thus severely diminished.”
Ben Bernanke said of the award, “I am incredibly honored, of course, to be a co-winner. It was completely unexpected. I am very happy to be sharing this prize with Douglas Diamond and Phil Dybvig, whose work on bank runs was very seminal, had a big impact on me in the early ’80s when I was working on these issues.”
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Ben Bernanke is currently on the faculty at Princeton. Princeton President Christopher L. Eisgruber commented on the news saying, “All of us at Princeton know Ben Bernanke to be not only a marvelous scholar but also a generous teacher, beloved colleague, and devoted University citizen. By using his path-breaking research, extensive learning, and practical wisdom to help lead America through a difficult financial crisis, Ben has exemplified brilliantly Princeton’s commitment to be ‘in the nation’s service.’ The Princeton community joins in congratulating him enthusiastically on this extraordinary and well-deserved honor.”
Ben Bernanke began a second term as chairman of the Board of Governors of the Federal Reserve System in February 2010. He originally took office as chairman in February 2006, when he also began a fourteen-year term as a member of the Board of Governors. His second term as chairman ended in January 2014 when he was succeeded by Janet Yellen.
Ben Shalom Bernanke was born in Augusta, Georgia to Jewish parents and grew up in Dillon, South Carolina. He received a bachelor’s degree in economics in 1975 from Harvard University (summa cum laude) and a doctorate in economics in 1979 from the Massachusetts Institute of Technology.
